Nigeria Becomes Third-Largest Debtor To World Bank’s IDA.
As of June 30, 2024, Nigeria has officially become the third-largest debtor to the World Bank’s International Development Association (IDA).
This change in status is significant and reflects a notable increase in Nigeria’s borrowing from this institution.
The information indicates that Nigeria’s loan exposure from the IDA rose to $16.5 billion, marking an increase of $2.2 billion from $14.3 billion recorded at the end of 2023.
The IDA is a crucial part of the World Bank that provides concessional loans and grants specifically aimed at assisting the world’s poorest countries. These loans are characterized by low interest rates and extended repayment periods, designed to foster economic growth, reduce inequalities, and enhance living conditions in developing nations.
Comparison with other countries
In terms of ranking among other countries with significant debt exposure to the IDA, Nigeria now follows Bangladesh, which holds the top position with $20.5 billion, and Pakistan, which is second with $17.5 billion. India has dropped to fourth place with an exposure of $15.9 billion, while Ethiopia, Kenya, and Vietnam follow closely behind.
The data shows that as of June 30, 2024, these ten countries collectively accounted for 63% of the total exposure of the IDA.
The increase in Nigeria’s debt underlines a shift in its financial dynamics under President Bola Tinubu’s administration during fiscal year 2024 (July 2023 – June 2024).
This borrowing trend raises concerns about sustainability given that a substantial portion of Nigeria’s international payments has been allocated towards debt servicing.
This development highlights not only Nigeria’s growing reliance on international financial assistance but also its position within a broader context of global economic support mechanisms aimed at alleviating poverty and promoting development. – NS
